Frame your market
What, fundamentally, does your business do? If the sky were the limit, what might it do?
In today’s radically unpredictable markets, the one thing you fully control is what you do – your business definition. And your business definition both spells your identity and frames how clearly you can see, and shape, the rest of your market. Business identity, then, really is market destiny.
Market shaping starts by recognizing that many strategists still needlessly hamstring their firm and blinder their market view by a stale or humdrum or me-too business definition. It then sets out all the tools and incentives you need to optimize that definition. Because even when it seems all bets are off, it’s a safe bet you can define a more profitable, growth-rich business and, through it, design a richer market.
· Before you can begin shaping your market, you have to frame it so you can see it clearly. Optimal framing is the first step in putting the rich, but generic, market view into practice in your own market, with your own firm's identity.
· The core consists of your business definition, and unlike the four layers, it is under your complete control. It's essentially your answer to that classic cocktail party question: ‘What do you do?’ or ‘What line of business are you in?’
· Not only does your business definition set your – actual and intended – identity; it frames how you see your market, by filtering and interpreting your market intel. Some sort of frame is inevitable. But with a narrow or rigid one you may either miss or misinterpret developments that a supple, diversified frame would have revealed as emergent trends in the market system or deliberate design of that system by market-shaping actors.
· Most frames are as restrictive, reductive and reflexive as the commonest answer to that cocktail party question: "I'm in the [mobile phone] market, in [China]". In fact, this is precisely where the product, or product-geography, view worms its way in. Conversely, this is also your chance to cast it out.
· Casting out the product view requires first, polishing your frame, or lens, to see more clearly. This is corrective: right or wrong. Second, you need to point your frame at the particular slice of the universe of all possible markets, where you want to operate. This slice becomes your starter market, which you might later choose to shape.
· Unlike polishing, pointing is a matter of choice. However, some choices end up better for growth and profitability than others. For, contrary to traditional belief, where you operate matters more for your top and bottom lines than how you operate.
· Every strategist needs at the very least to be aware of their business definition and to regularly ask whether they can make it more profitable and growth-rich. Strategy gurus have long said as much, but without supplying sufficient tools or integrating the advice into our rich market context. Our clients succeed in brainstorming alternative market frames, or "frame-storming", because as well as the context we supply very specific tools and processes. The processes for frame-storming are zooming out and zooming in.
· Zooming out – using our Business Definition Radar and many real-world examples – is the most potent way we know to break you free from the product-geography myopia.
· Zooming in – using our Business Arena Generator can turbo-charge your market segmentation and help you find fast-growing (or otherwise interesting) growth pockets in your existing market and viable adjacencies you can expand into.
· The exercise of optimizing your business definition and thus your market frame equips you ideally to embark on market shaping proper. However, the two needn't go together: they can be decoupled.
Illustration: Business Definition Radar -finding novel business definitions